The Best Ways to Repair Credit History

You can repair credit history by resolving mistakes in your credit report, establishing good debt habits and taking advantage of credit repair services.

Review Your Credit Report

The first step to repair your credit history is to review your credit report. Your payment history is reported to credit bureaus, which compute a credit score for you, and maintain a record of negative activity. Credit card and loan companies look for good credit scores when they offer credit.  A score of 620 or below is considered bad credit and will typically disqualify you for many loans. On the other hand, a score of 720 or above means you have excellent credit.

You are entitled to one free credit report each year from the three largest reporting bureaus. The three bureaus are Experian, Equifax and TransUnion. If you have already used your free annual review, the cost for another report is only about $30.

Resolve Credit History Mistakes

Your credit report will contain a record of what lenders say are unpaid loan balances, closed and charged off accounts, and balances turned over to collection agencies. They are also records of any legal actions such as a bankruptcies or judgements.

Carefully review every item on your credit report. If you can document a discrepancy - for example a late payment on a credit card  for which you have evidence of on-time payment - write the credit bureau, document the error and request the negative information be removed. They must respond to you in 30 days, and if there is an error, they must either fix the error, or tell you why they believe the information to be correct.  Also, they will give you a free copy of your credit report to show the changes.

Establish Good Debt Habits Now

If you have a bad credit score and seek to repair your credit history, you are not alone. There are an estimated 30 million Americans with a score of 620 or below. Whether there are mistakes on your credit history or not, developing good credit habits can help repair credit history over time. Negative credit information must fall off your credit report after seven years, 10 years for a bankruptcy.

Develop a spending plan in which you can comfortably live. Get current on all debts and stay current. Don’t borrow more often than you need to or apply too often for credit cards.

Request Recognition for Good Habits

If you become a good borrower, build a relationship with your lender. After establishing a track record for reliability you can repair credit history with a goodwill action from the lender. As an example, if you have late payments on a credit card and have kept that card, a history of on time payments can earn you the standing to request the lender remove one or more of the negatives from your report. They are not required to do this, but if you have become good customer, they might do it to keep you happy.

Credit Repair Services

Credit score repair services can help, but be wary of anyone promising they can fix credit scores fast. A credit score repair service disputes inaccuracies on your behalf. If you have a lot of mistakes on your credit report, then you can improve your score. Otherwise, as outlined above, it takes time and good borrowing habits to repair credit history.

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